\u3000\u3 Bohai Water Industry Co.Ltd(000605) 111 Wuxi Nce Power Co.Ltd(605111) )
Event overview:
The company released its first quarterly report: the revenue was 420 million yuan, a year-on-year increase of + 31%, the net profit attributable to the parent was 112.4 million yuan, a year-on-year increase of + 50%, and the net profit not attributable to the parent was 110.2 million yuan, a year-on-year increase of + 48% – both profits exceeded the previous forecast ceiling of 110 million yuan. Through calculation, the company’s Q1 revenue was +5%, net profit attributable to parent company was +13% and net profit not attributable to parent company was +14% month on month.
The business rhythm of the company continued to increase and its profitability remained high
Adding back 19.08 million yuan of equity incentive expenses, the company’s 22q1 net profit deducted from non parent company was 129 million yuan, an increase of 73% year-on-year and 33% month on month. The business rhythm continued to increase, showing the high prosperity of the power track. At the same time, the company’s profitability remained high: Q1 gross profit margin was 39.72%, year-on-year + 6.23pct, flat month on month; The net interest rate was 26.72%, with a year-on-year increase of + 2.98pct and a month on month increase of + 1.72pct.
The photovoltaic business is full of flexibility and sufficient capacity guarantee
From the perspective of photovoltaic industry, after the new installed capacity of 1-2 kV exceeded expectations, photovoltaic subsidy policies were issued in many places in March, which continued to push up the boom. According to Jibang new energy network, the installed capacity of PV in China in Q1 increased by 12.9gw, with a year-on-year increase of + 131%, including 9gw of distributed PV, accounting for nearly 70%, and 3.9gw of centralized PV, accounting for 30% – the high growth trend of distributed PV continued. In addition, according to the prediction of Jibang consulting, China’s newly added photovoltaic installed capacity in 22 years was 75gw, yoy + 37%, higher than the year-on-year growth rate of 14% in 21 years. Specifically, most of the local PV subsidies are inclined to distributed PV. It is estimated that the newly installed capacity of distributed PV will be 50gw, yoy + 67% in 22 years, which will fully benefit the demand for upstream IGBT single tube products – and photovoltaic IGBT single tube is the main field of domestic substitution at present. From the company’s own point of view, the company’s products have been introduced into a number of major domestic photovoltaic customers. With the 12 inch expansion of Huahong semiconductor, the performance is full of flexibility under the guarantee of production capacity.
The proportion of automotive electronics revenue is expected to increase rapidly
In the middle of March, Shanxi Guoxin Energy Corporation Limited(600617) automobile continued its good momentum: according to the China Federation of passengers, the sales volume in China in March was 455000, with a year-on-year increase of + 122% and a month on month increase of + 44%. The sales volume of major automobile enterprises increased significantly year-on-year, and many models set a single month sales record – among which, the sales volume of new energy in Byd Company Limited(002594) March was 104000, and the sales volume of Q1 was + 433% to 285000. In the past 21 years, the company imported Byd Company Limited(002594) and other key customers into automotive electronic products, and realized mass shipment of 10 + products. At the same time, it also imported many Tier1 manufacturers. Looking forward to 2022, the aec-q101 certification of various automotive electronic products of the company is expected to make rapid progress, and it is expected to introduce more Tier1 manufacturers. With the addition of 12 inch capacity expansion of Huahong semiconductor, the proportion of automotive business revenue is expected to increase rapidly.
Relying on the prosperity of the industry, realize the upgrading of customer structure
Focusing on the market demand and industry development trend, on the one hand, the company further strengthens the development of new energy fields such as photovoltaic / energy storage and automobile, on the other hand, it actively expands high-end fields (such as high-end industrial control, high-end electric tools, 5g base station power supply, UAV, Siasun Robot&Automation Co.Ltd(300024) and other fields), and strives to realize the dual optimization of customers and market structure.
Investment advice
We maintain the prediction that the net profit attributable to the parent company of the company in 2022 / 23 / 24 will be 5.2/6.3/830 billion yuan, with the corresponding PE of 51 / 42 / 32 times. With reference to the current 85 times PE (TTM) of Shenwan semiconductor, considering that the company, as one of the leading IGBT / MOSFET enterprises in China, can grow with the acceleration of domestic substitution and the large amount of upstream energy production, and maintain the “buy” rating.
Risk tips
The industry boom is less than expected, the progress of R & D is less than expected, and the ramp up of OEM capacity is less than expected.
